FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : REGIONAL NEWSPAPERS OF IRELAND (RNAI) (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - NATIONAL UNION OF JOURNALISTS DIVISION : Chairman: Mr McGee Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Defined Benefit Pension Scheme.
BACKGROUND:
2. The Employers represent approximately twenty Regional /Local newspaper businesses countrywide. There is an agreed Defined Benefit(DB) Pension scheme in place with workers currently contributing 5% and the employers contribution being 6.9 % (most recently). An actuarial assessment indicated that the overall contribution would need to rise to 18.7% from March, 2006 in order to meet projected future liabilities. Following this assessment the Employers advised the Union that they were terminating the DB scheme and proposed to implement a Defined Contribution (DC) Scheme in place in each employment. The Union rejected the proposal. The dispute was referred to the Labour Relations Commission, and a number of conciliation conferences were held. Agreement was not reached and the dispute was referred to the Labour Court on the 12th June, 2006 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 22nd June, 2006
UNION'S ARGUMENTS:
3. 1. The DB Pensions scheme is fully funded and has been place since 1975.
2 The Employers are making significant profits.
3. The scheme should not be closed to new members because this would damage the scheme as an ever dwindling number of workers are paying contributions for the benefit of an increasing number of pensioners.
4. Any contribution less than the required 18.7% employers and 5% employees required by the actuary would effectively close the scheme. The Employers can afford to make the contributions to the level required and continue to operate the DB Scheme as they have done since 1975.
3. The claimants who have contributed to the value and success of all of these regional newspapers should not be sacrificed in a situation where all costs are cut and profits increased.
EMPLOYERS' ARGUMENTS:
4. 1. The DB Scheme was suffering from poor performance of the equity markets in which a large proportion of the scheme's assets were invested. There seemed little merit in continuing to commit funds into a scheme that did not have a medium or long term prospect of solvency and faced an open ended increase in contributions to guarantee a notional final pensionable salary that did not reflect the actual earnings of a large number of members.
2. The DB Scheme is unsustainable into the future. The pension provider is in the process of winding up in excess of 90 DB Pension Schemes at the moment. Sound financial management leaves no alternative but to protect the investment to date and not see it diminish in a poorly preforming fund.
3. The Employers submitted a proposal to the Union on the 2nd May, 2006 as follows:
The scheme to be maintained until 1st March, 2007 and reviewed at that time.
Increased contributions would be 12.8% from employers and 10.9% from employees.
Final pensionable salary to remain at €25,561
Death in Service benefit to be maintained.
No new members to be admitted
Employers to be free to promote DC schemes to their employees.
The Union has not responded as to the acceptability or otherwise of this proposal.
RECOMMENDATION:
The Court has carefully considered the submissions made to it by the parties. The Court is not convinced, at this stage, by the Employers' argument that the existing DB pension scheme should be terminated as a result of insurmountable funding difficulties at this point in time.
The Court recommends that the Employer contribution be increased to 15.2% and Worker contribution to 8.5%, that the level and performance of the scheme be kept under constant review and that those workers who are not in membership of the scheme should join the scheme as per the conditions of employment clause in the current working agreement between the RNAI and the NUJ.
Signed on behalf of the Labour Court
Raymond McGee
29th June, 2006
tod______________________
Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.